MAC: Mines and Communities

New Gold's appeal on Mexico EIS ruling blocked

Published by MAC on 2010-07-17
Source: Mining Weekly, Canadian Press (2010-07-07)

New Gold's appeal on Mexico EIS ruling blocked

Chanel de Bruyn

Mining Weekly

7 July 2010

JOHANNESBURG - Vancouver-based New Gold on Wednesday said it would continue to pursue all avenues to ensure the continuous operation of its Cerro San Pedro gold/silver mine, in Mexico, after a district court denied its appeal against a 2009 ruling cancelling the mine's environmental-impact statement (EIS).

The Fifth Auxiliary District Court, in Mexico City, on Wednesday denied the gold miner's appeal against the September ruling made by the Federal Court of Fiscal and Administrative Justice, which ordered the Mexican environmental regulatory agency, the Secretaría de Medio Ambiente y Recursos Naturales (SEMARNAT) to cancel the EIS by November 2009.

The miner said that the legal dispute was related to a land use issue, adding that there were no environmental problems with the mine.

New Gold told shareholders that while it had received notification from the district court about the latest decision, it had not yet been provided with the full decision and the written reasons for the denial of the appeal.

The company was expecting to see the detailed report in the coming weeks and would review the decision, after which it planned to file an appeal with a Collegiate Appeals Court in Mexico City.

It was also considering filing an application with the Mexican Supreme Court to request it to hear the case.

Meanwhile, the producer said it remained in discussion with SEMARNAT, as well as the Mexican environmental enforcement agency PROFEPA, to work towards the uninterrupted operation of the mine.

"While we are disappointed by this most recent decision, we will continue to pursue all avenues to ensure the continuous operation of Cerro San Pedro," said New Gold president and CEO Robert Gallagher.

The company expects to produce between 330 000 oz and 360 000 oz of gold in 2010, growing to over 400 000 oz in 2012.

Cerro San Pedro mine, which started operating in 2007, was expected to produce between 80 000 oz/y and 100 000 oz/y of gold, as well as 2,25-million ounces a year of silver, over its nine-year mine life.

Edited by: Mariaan Webb


New Gold stock plummets nine per cent after Mexican court reversal

The Canadian Press

7 July 2010

VANCOUVER - New Gold Inc. stock was down sharply Wednesday in the wake of a Mexican court decision that denied the Canadian mining company's appeal of an adverse environmental ruling.

The shares of New Gold (TSX:NGD) fell by as much as 14.5 per cent after the Vancouver-based intermediate gold producer announced it had received a negative ruling but no details.

New Gold stock recovered some ground later in the day, closing down 69 cents, or 11.35 per cent, at $5.39 amid heavy volume of 14,287,171 shares on the Toronto Stock Exchange.

The company said earlier that it has been informed that the Fifth Auxiliary District Court in Mexico City had turned down its challenge to an earlier court ruling that ordered Mexican regulators to cancel the environmental impact statement for New Gold's Cerro San Pedro Mine.

"Although New Gold has been informed by the court that the decision is negative, the company has not yet been provided the full decision, including the written reasons for the denial," the company said in a statement.

"As a result, the company is not presently aware of the implications this could have on the Cerro San Pedro mine, which is currently fully operational."

New Gold said it expects to receive a detailed copy of the decision in the coming weeks.

"After the company has had the opportunity to review the full decision, New Gold will file an appeal with a Collegiate Appeals Court in Mexico City. In addition, the company may file an application with the Mexican Supreme Court requesting it hear the case."

Meanwhile, the company says it is continuing discussions with the Mexican government's environmental enforcement agency in hopes of avoiding a disruption of operations at the open-pit gold and silver mine operated by its Mexican subsidiary, Minera San Xavier or MSX.

The company contends that the Cerro San Pedro operation complies with "the highest environmental standards and should remain operational for the benefit of its local employees and the surrounding communities."

"While we are disappointed by this most recent decision, we will continue to pursue all avenues to ensure the continuous operation of Cerro San Pedro," said president and CEO Robert Gallagher.

Besides the Mexican mine, New Gold also has operations in the United States and Australia.

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